Proprietary and Risk premium: Difference between pages

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1. ''Financial reporting - fair valuation.''


A trade or position undertaken by a financial institution on its own behalf.
For financial reporting and fair valuation purposes, risk premium is  defined as additional compensation sought by rational risk-averse market participants for bearing the uncertainty inherent in the cash flows of an asset or a liability.
 
This is a similar concept to market risk premium in the Capital asset pricing model.




2.
2.


Subject to restricted use and the intellectual property rights of an owner or developer.
More broadly, value ascribed by any market participant to a reduction in uncertainty.


For example, proprietary software.
This value would not necessarily be the same for all market participants.




== See also ==
== See also ==
* [[Developer]]
*[[Capital asset pricing model]]
* [[Intellectual property]]
*[[Fair value]]
* [[Property]]
*[[Hurdle rate]]
* [[Proprietary trading]]
*[[IFRS 13]]
* [[Software]]
*[[Market participant]]
*[[Market risk premium]]
*[[Rational]]
*[[Risk appetite]]
*[[Risk averse]]
*[[Risk free rate of return]]
*[[Risk management]]


[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Risk_frameworks]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 12:46, 7 February 2021

1. Financial reporting - fair valuation.

For financial reporting and fair valuation purposes, risk premium is defined as additional compensation sought by rational risk-averse market participants for bearing the uncertainty inherent in the cash flows of an asset or a liability.

This is a similar concept to market risk premium in the Capital asset pricing model.


2.

More broadly, value ascribed by any market participant to a reduction in uncertainty.

This value would not necessarily be the same for all market participants.


See also